Policy Options for Public Enterprises Reform in Nepal: A Look at Two Public Enterprises

Authors: Bimal Wagle, Akash Shrestha, Koshish Acharya

This policy analysis paper titled “Policy Options for Public Enterprises Reform in Nepal: A look at two public enterprises” is prepared under the banner of Nepal Economic Growth Agenda (NEGA) 2014, which is preceded by NEGA 2012 and NEGA 2013. NEGA is an annual effort of Samriddhi Foundation to identify key constraints to Nepal’s economic growth and policy options for reform.

This specific policy analysis paper takes a deeper look at two of the thirty six existing public enterprises in Nepal to propose concrete policy options for reform. The two public enterprises studied in the paper – Nepal Airlines Corporation (NAC) and Hetauda Cement Industry Limited (HICL) – have been facing high cumulative losses and presence of unfunded liabilities due to operational inefficiencies and other problems.

Analyzing their poor performance from a policy perspective, the paper identifies practical reform options which are mainly focused on improving the organizational efficiency either by bringing changes in the current working modality or by introducing a new modality based on a cost benefit analysis. Overall, the paper seeks ways to pave way for similar analysis of other public enterprises which are increasingly becoming a burden on taxpayers and consumers.